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The Pound Shows a Forward Discount Against the Dollar (The

Question 173

Multiple Choice

The pound shows a forward discount against the dollar (the forward rate is less than the spot rate) when


A) interest rates in the United Kingdom are higher than those in the United States.
B) interest rates in the United Kingdom are lower than those in the United States.
C) real GDP is higher in the United Kingdom than in the United States.
D) real GDP is lower in the United Kingdom than in the United States.

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